This company could also be referred to a. Samantha would like to own her own business but doesn't want to start it from scratch. C. Training. the exact status of the franchisor's intellectual property, such as logos, symbols, and words. C) Popularity Franchising and franchise channels continue to grow dramatically. The franchisor cannot require the individual franchisee to adhere to a(n) ________. All of the following are disadvantages of franchising for the franchisee, except for: typically operate as a non-unionize business establishment. Does a physical count correspond with the book count? b. C) Inclusive franchising An entity or invidiual granted the right to conduct business according to specified methods and terms of another party is known as a, A legal agreement between two parties in a franchise arrangement is referred to as a, benefits of becoming a franchisee include all of the following terms except, Franchise costs include all of the following expenses except. D. System to network with competing franchises. B. b. machinery. "The Franchisor, Its Predecessors, and Affiliates" section of the UFOC _________. C. Companies like Proctor & Gamble frequently use the franchise channel model for distribution of consumer goods. amount to the government independent of his or her A) Success One of the main reasons she may have made the move was. b. d. E) Brand, Subway restaurants can be found ________. He states in the plan, "This business will serve over 400 customers by the end of the year and employ ten full-time employees." The person who sells the franchise is usually required to do all of the following except: c. A trial period of at least 3 years C. Court permission D. Notice to the NOT: it sometimes develops an imprecise picture of the franchise. E. Single-unit franchises are a very low-cost method of selling. a. T/F, There is no need to find out more information about a prospective franchise as the franchisor should be the primary source of information T/F, A franchising strategy whereby a single franchise owns more than one unit in a given area is typically referred to as an area developer strategy T/F, The potential value of any franchise arrangement is defined by the rights outlined in the franchise contract. The franchisor licenses its trademarked products to franchisees. Which of the following organizations can assist him? Which of the following is NOT one of the four P's of selling? b. c. it can be either franchisor- or franchisee-driven. The most common form of business ownership in the United States is the corporatio. new-old, When one discusses upside gain and downside loss, one is talking about This includes all of the following except: Which of the following is true about co-branding? b. d. The approach to be used by a franchisee in providing the franchisor's products or services to the customer is called: Composite data about the franchise industry itself suggests which approach to franchising continues to experience strong growth: In 1979, the Federal Trade Commission established Rule 436.1, also known as the Franchise Disclosure Act, for the purpose of: diminishing illegal and unethical practices. According to the SBA, in 2012 women were 51 percent of the U.S. population, and owned at least ___ percent of all small businesses. Identify an accurate statement about buying an existing business. Regulations that protect consumers include trademarks, zoning, regulations, and consumer protection laws. A(n) _______ _______ is a basic contract generated by a franchisor for all franchisees. Which of the following statements best describes franchise channel structure? When will the activities be started and completed? How many years will she have to repay the loan? The business arrangement, otherwise called a franchise opportunity, has three major components that constitute the essence of what is generally referred to as a franchise. Which of the following could he use to protect his interests?. E) An act of God, In relation to franchising advantages, you purchase the use of the company's logo, trademark, and advertising, as well as the physical design, layout, and dcor that ensure ________. What exactly is to be done in each segment? B) Research b. 3- Customers already know you exist. a. Marketing strategy. E. Number of manufacturers in the industry. 9 a. The number of jobs provided by franchised businesses is slightly less than those provided by durable goods manufacturing. c. After all of your investigation into a franchise, the final decision should be up to Which philosophy of expansion is, as a rule, the best method for franchisors? c. your financial backer. f(t)=t2t+2. both of the above. The person who gets the franchise is usually required to do all of the following except: disagreements between the two parties have increased and contract disputes are causing many lawsuits. Business format franchising is best illustrated by the system offered by, The franchising strategy whereby an individual or firm is granted the legal right to own more than one unit of a franchised business is known as. Which of the following is Untrue about the policies and procedures of a franchise system? franchisor Which of the following is NOT an element of virtual relationship management in e-business strategy? All of the following are a new type of franchising opportunity except ________. This is a ___ business. Which two factors are especially relevant in the scope and frequency of franchisee evaluations by franchisors? B. b. B) Termination of the franchise a trade restriction clause. The franchise with the most outlets in the United States is. The start-up and ongoing assistance provided by a franchisor guarantees your success. Changes in leasehold conditions. A regular and continuous fee paid to the franchisor by the franchisee is called: Which of the following is a disadvantage for the franchisor? Buildings The product quality is within the perception of the customer and is greatly influenced by the franchise system's server. and Macy because the SBA's primary financial function is to guarantee loans. track record of the franchisor d. A potential franchisor is concerned that the franchisees will destroy the reputation of the company and end up hurting his business. The franchisor provides a system for the franchisee to operate the business. a financial investment. weaknesses. Franchise agreement usually allow the franchisee to operate the business _________. The founding a franchise is quite ________ in form and method to creating a new business from scratch. franchisee. all of the above. franchisette. All of these are ways a franchisor makes money; c. E. All of the above are about equal. A) Fees and costs T/F, As of 2008, the Federal Trade Commission's Franchise Rule presribes that franchisors must disclose to prospective franchisees info such as bankruptcies, business experience of the principals, and litigation in which the firm is involved. A) Guarantees brand recognition What are the typical payments paid by a franchisee to a franchisor? c. Business related reasons for selling may include all but which of the following? What is the name of that program? c. What amount is generally considered adequate? A corporation pays taxes both on its income and on the amount it pays out in dividends, it faces very little government regulation. As a class assignment, business students were told to prepare a business plan for a business they would like to own. Which of the following is an advantage to the franchisee? Franchises include the business name and a general plan for business operations. An ongoing entity often has a higher purchase price due to __________. Changes in zoning which affect the business. c. NOT: customers Master franchises do not allow individuals and organizations to buy the right to subfranchise within a delineated geographic territory. Compensate the franchisee for the use of its trademark. A) Themselves WebThe Federal Trade Commission monitors all of the following activities except the sale of unhealthful foods The Franchise Disclosure Document helps the franchise buyer to make Automotive d. E) None of the above, All of the following are factors of franchise cost except ________. d. equipment. Solved Knowledge Check 01 Which of the following statement Which of the following are resources that an entrepreneur can typically use to find a business for sale? all of the above. c. H0:1222Ha:12>22\begin{aligned} Uniqueness in a product or service can be demonstrated through a new-new approach or Which technique is not valid for valuing a company? Franchisees may pay a fee that is separate from the royalty fee, often called a cooperative advertising fee, to contribute to an individual advertising fund. He is considering applying to small firms because he knows that small businesses have traditionally added _____ new jobs to the economy. In purchasing an existing business the first question should be: "Why are you selling?". b. Which of the following is not a key question a prospective buyer needs to ask in buying a business? A franchise is a business that markets a product or service developed by a franchisor, typically in the manner specified by the franchisor. The Uniform Franchise Offering Circular _______. E) None of the above, Franchisors are focused on creating wealth for ________. "Pro forma" accounting statements as used in business financial planning means: a statement of anticipated costs and revenues or change in assets, liabilities and equity based upon prior (operating) financial performance. b. Organization the process of change within the business True or false: A poorly performing or disruptive franchisee detracts from the overall operations as well as taking time and effort of the franchisor away from the business of growing the brand. The franchise's time frame. Which of the following should the potential entrepreneur consider in developing a plan of operation? What are the four main areas of taxation one must consider when reporting about a franchise's activity? & H_{\mathrm{a}}: \sigma_1^2>\sigma_2^2 b. c. d. One of the advantages of buying a franchise is that the purchaser has access to a proven business system. to identify factors which may pose major threats to or provide significant opportunities for the franchise system. An individual looking to buy a franchise should _________. Jimmy John's, Which is not a cost of franchising? Franchising offers all the following benefits for franchisers except. D) Federal Disclosure Document a. T/F, Valuing a company is an easy task that results in a precise figure T/F, Financial statements can mislead a potential purchaser trying to develop an accurate business valuation T/F, A nondisclosure agreement signed by a prospective buyer shows the seller that the buyer intends to purchase the business T/F. b. This means that it is a riskier purchase than the purchase of a franchise. The initial franchisee vetting usually includes _________. all of the above, What is the largest source of new business ideas among men? all of these are reasons it could be beneficial. True. d. determines the salaries of the corporation's officers. C) Never provide help for start-up D. The challenges managing a franchise channel are fundamentally the same as those encountered in conventional channels. Changes in the product supply chain. The franchisor says it has the power to control which suppliers the franchisees use due to implied powers in the franchise agreement. to generate data which can be used to accumulate working knowledge. Where should the business be located? To be a successful leader, Jim Peterson, franchisor and former President of the IFA, believes it is necessary for four factors to exist for a person to be a successful leader. You stop by a Carl's Jr. fast food restaurant and notice that they also have Green Burrito Mexican food. The Clayton Act makes it illegal for competitors to get together and set prices on the products or services they sell. a. B) Not required The product life cycle model is a theoretical construct that helps franchisors understand the industry cycle and the cycle of specific products or services with a franchise system's product line. Pay for all physical assets (e.g., equipment and building), needed to operate the franchise. Uniform Franchise Offering Circular (UFOC) Which of the following sequences indicates the path taken by these figures during the accounting process? What special skills does the entrepreneur have that will bring success? of dollars instead of units. C) Territory c. c. A. Which of the following types of financial ratios measures the ability of the franchise organization to turn sales into profits? C. In a franchise, parties are independent. all of the above, The UFOC contains how many sections: new-new 20% B. Royalty agreement A significant amount of up-front cash is required to begin operations. When buying a business, competition must be investigated because Which of the following is something that would not be included in the plan? E. None of the above. C) Ensures ongoing support c. Maria has purchased a Subway franchise. market value. A. E. The details of franchise management are vague enabling franchisees to adapt to changing environmental conditions. The Federal Trade Commission regulates franchise. 41 B. Business related reasons for selling do not include which of the following? number of competitors. a. D) Both A and B D. Reduce uncertainty The potential value of any Which of the following are areas that the potential franchisee may be able to negotiate with the franchisor? Juan has been awarded a franchise in an industry in which the franchisor has licensed him to sell and distribute its product to retailers. d. pay a fee. A) In traditional stand-alone units B. The Consumer Product Safety Act of 1972 sets safety standards for products other than food and drugs. Firm's records old-old C) Any suppliers Franchisors must have a high-quality support the ability to build personal relationships with the owners and other employees. A franchisee that has inconsistent quality or service not only hurts his or her own business but also impacts the brand images of all the other franchisees. What helps you identify the customers whose needs your franchise best satisfies? C. Generally, franchise marketing channels are more closely knit (i.e., closer relationships) than conventional channels. _________ is a broad area that encompasses such things as brochures, signs, logos, televisions advertisements, newspaper, advertisements, sales techniques, adn internal business design. new-new Spend a significant amount of time being visible. The first step for the franchisor to do is: contact and listen to each franchisee as possible, to determine what are the problems to be addressed. All of the above. Small businesses have an advantage over large businesses in all of the following areas except, Jimmy and Henry are considering opening a smoke shop. Which of the following things is NOT true about the accounting process? B. Before we discuss who gets control of the franchise operations, lets clear up some terms about the people involved in the franchise model. The franchisor owns the trademark and business model. Upon paying the upfront fee and continuing royalties, the franchisor grants the franchisee the rights to use the trademark and business model. Terry's is a. Characteristics of a small business would include all of the following except. age of the competition's owners. Policies and procedures for running the business. The ability to leave the venture if an entrepreneur does not enjoy the business is severely limited. His customers often talk about trikes. Several years ago the British government imposed a Independence and a desire to determine one's own destiny are some of the entrepreneurs' personal factors in small-business success, others include: Jennifer would like to open her own business. asset value. a. Which of the following does Smoothie King founder Stephen Kuhnau credit as the reason for his success? discloses any predecessor to the current business. E. None of the above. Business situations that are appropriate to consider when looking for growth through franchising include all but which one of the following?
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